Smash the System?

The dangerous plan to make college cheaper by busting “the college cartel.”

The government has smothered low-cost competition by turning higher education into a “cartel,” Utah Sen. Mike Lee wrote recently. Above, Lee speaking on May 30, 2014, in New Orleans.

Photo by Justin Sullivan/Getty Images

Ask liberals why college is getting so expensive, and they’ll probably tell you it’s a case of government neglect. States have cut education funding. Federal Pell Grants for low-income students haven’t kept up with the cost of tuition. Regulators have failed to crack down on predatory for-profit schools that charge high prices for sometimes worthless degrees.

Jordan Weissmann is Slate’s senior business and economics correspondent.

Ask conservatives the same question, and they’ll tell you the opposite. The real problem, they’ll say, is a pernicious case of government coddling. The unlimited supply of federal student loans has allowed schools to hike their prices to stratospheric heights without driving away undergrads. Feds have smothered low-cost competition by turning higher education into one big highly protected “cartel,” as Utah Sen. Mike Lee put it in an essay for The Federalist.

How so? In order for their students to receive federal aid, colleges and vocational programs need to be accredited. The accrediting agencies, which are independent of the government, mostly give their blessing to schools that look an awful lot like traditional institutions of higher education, with brick-and-mortar buildings, well-credentialed faculty, and a nice mission statement. (No sarcasm intended: They really do care about mission statements.) Sure, these schools might offer online courses. But for the most part, the argument goes, the accreditation process helps perpetuate a fairly expensive model for students and prevents any radical and inexpensive experiments from lifting off. That’s both because almost nothing in higher ed can survive without some access to federal aid dollars—even if students are enrolled in free programs, they need to cover living expenses—and because other colleges won’t accept transfer credits from nonaccredited institutions.

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What do Republicans want to do about it? Smash the cartel, of course. “As was the case for airlines, trucking, and telecommunications, higher education needs a deregulatory agenda that breaks down these barriers to entry,” the American Enterprise Institute’s Andrew Kelly wrote in the reform conservative manifesto “Room to Grow.” In January, Lee introduced legislation that would give states a major role in the accreditation process. The bill has nods of approval from potential presidential contenders Marco Rubio, who has his own proposal on the issue, and Paul Ryan, who dedicated a little-discussed section of his anti-poverty plan to “shaking up the accreditation status quo.”

Where the college accreditors truly drop the ball right now is in quality control.

The hope is that once Washington breaks the hold of today’s accrediting agencies, new, high-tech approaches to education can flourish. Take Lee’s plan. Right now, the Department of Education relies on a network of nine regional accreditors, as well as a bevy of national ones that generally rate vocational and religious institutions, as well as specific programs. Lee would leave that system in place, but would allow every single state to approve its own accreditors as well. Some could be nongovernmental associations, as now; some might be businesses. In addition to approving entire colleges or degree programs, they would be able to rate individual courses, like the free massive open online courses offered by sites such as Coursera and EdX. That way, students could piece together their educations à la carte, as if they were ordering off a pedagogical tapas menu.

“Under state accreditation, higher education could become as diverse and nimble as the job-creating industries looking to hire,” Lee (or his ghostwriter) explains. “Authorized businesses could accredit courses and programs to teach precisely the skills they need for their employees. Apple or Google could accredit computer courses. Dow could accredit a chemistry program, and Boeing could craft its own aerospace engineering ‘major.’ ” In other words, relax regulations, and let a thousand flowers bloom.

Even if conservatives have been the most eager about rethinking accreditation, there are plenty of moderates and liberals who are keen on the idea as well. President Obama himself has embraced the concept: In 2013, he called on Congress either to tweak the current accreditation setup or establish “a new, alternative system of accreditation that would provide pathways for higher education models and colleges to receive federal aid based on performance and results.” Theoretically, that would give online programs a path to federal recognition. In left-wing think-tank land, meanwhile, David Bergeron of the Center for American Progress has advocated for creating an accreditor that could award students course credit for those free MOOCs.

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All this talk of innovation and market-based solutions sounds great in theory, but in practice, it could make a troubled situation worse.

First off, we should give accreditors a fair shake. They might not be terribly friendly to educational innovation, but they do occasionally let it slip through. Western Governors University, for instance, doesn’t fit anybody’s idea of a traditional college—it’s a competency-based program where students enroll, study on their own with the occasional help of an adviser, and then are tested on their knowledge whenever they feel they’re ready. But it is accredited.

Where the accreditors truly drop the ball right now is in quality control. The entire point of requiring schools to be accredited before they can become eligible for federal aid is to make sure students don’t take out loans for a worthless education while burning taxpayer money in the bargain. As the rise of unscrupulous for-profit colleges demonstrates, the accreditors have basically abdicated that responsibility. Adding yet more accreditors into the mix, and making more programs eligible to profit off of loan dollars—without making it easier to kick schools out—would only worsen our problems with predatory colleges.

“If you just lowered the barriers to entry and in no way lowered what it takes to kick people out, you’d have a disaster,” said New America Foundation senior policy analyst Ben Miller, who recently wrote a four-partserieson how to make accreditation more innovation-friendly. One idea would be to provide different tiers of accreditation—students at some programs would only be eligible for limited amount of federal loans or grants, while students at higher-rated schools might be eligible for more. Agencies might be more willing to punish a bad actor if they could downgrade its accreditation status rather than revoke it entirely—which is the only option available to them right now. Today, accreditors are hesitant to take any kind of action against failing colleges, in part because administering the death penalty to a college has a way of ticking off politicians.

Any conversation about fixing our broken accreditation system needs to think about both sides of the equation: making room for new ideas and pushing out bad ones. Right now, the majority of politicians are focused mostly on the first half, which should worry us all. You can talk about smashing the cartel all you want. But I’m not sure anybody would be happy with what might take its place.